14 years later, where do things stand in Lower Manhattan?

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It's been said that necessity is the mother of invention: Fourteen years after the horrific events of 9/11, lower Manhattan is dramatically different. From the immediate months after the tragedy to the concerted revitalization efforts in the years that followed, and onto the boom-and-bust cycle of the aughts to the current boom period, this slice of downtown—which includes Tribeca, Battery Park City, the Financial District, and Civic Center—has been the subject of much speculation and hopeful curiosity. Today, we take a look back on how the area's changed in the past decade and a half, what buyers and renters will find there now, and what the future holds:

One of the many shock waves that rippled through the city in the aftermath of the September 11th attacks was a real estate market quickly grinding to a halt, particularly downtown. "The Financial District, Civic Center, and areas right near Ground Zero got hit the hardest," says Noah Rosenblatt, founder of real estate analytics site, UrbanDigs. "For months after, there wasn't much deal volume, and you'd see 30 or 40 percent discounts." (Indeed, according to data from the brokerage firm Douglas Elliman, the average price in Tribeca dropped 34 percent from the fourth quarter of 2001 to the first quarter of 2002.)

Then came a number of incentives to the rescue. Created to spur growth, they consisted of the Fed lowering rates, New York state offering tax abatements to developers, and as we've written previously, landlords giving renters steep discounts to stick around downtown.

It worked, and lower Manhattan prices eventually got swept up in the 2007 bubble along with the rest of the city, though the lay of the land was very different than the 2015 version. "Back then, if you couldn't afford to live in Tribeca, you'd look in the Financial District or Battery Park City, which weren't considered as desirable as they are today," says Douglas Elliman Insights vice president Sofia Song, who lived in Tribeca between 2003 and 2011. Adds Warburg broker Deborah Lupard:"When I started in the neighborhood in 2007, prices in the Financial District were around $900 per square foot, compared to $1,200 in Tribeca ".

Downtown was also still seen as a largely transient neighborhood, the rental-heavy turf of traders, investors, foreigners, and pied-a-terre owners. And the housing stock reflected the trend accordingly. Smaller apartments were the norm and, Song notes, "[in some new developments], the kitchens basically weren't functional. They weren't designed for family living."

With the completion of One World Trade, the 9/11 Memorial Museum, the shopping center at Brookfield Place, and the long-time-coming new Fulton Center subway hub (pictured above), one could correctly assume that years of investment and development efforts have started to coalesce. "No matter what you’re looking for, you have more options than you did in the last couple of years," says Downtown Alliance President Jessica Lapin. "There have been $30 billion in private and public funds invested here in parks, schools, buildings, etc. You’d be hard pressed to find investment on that scale anywhere else in the world."

As for prices, we asked UrbanDigs to chart the median price-per-square-foot in Lower Manhattan's neighborhoods and compare them to the overall Manhattan median. As the charts below show (click to enlarge), Tribeca still leads the pack, but most of the area is enjoying a steady climb, with the exception of Civic Center. If you isolate the Financial District, you'll see that in early 2015, price per square foot finally surpassed the Manhattan median. (As we wrote earlier this year, the neighborhood's days as a relatively affordable downtown oasis are rapidly waning.)

In a nutshell: more of the same. (Barring any sweeping changes in the city's overall market, that is.) "I think there's a tremendous upside for further development and expansion in [areas like the Financial District] as residential," says appraiser and Miller Samuel president Jonathan Miller.

Also likely to continue? Price hikes. (You knew that one was coming, didn't you?). Song refers to it as Tribeca's "halo effect" of bringing up values in its bordering neighborhoods. (See also: what Williamsburg hath wrought on the rest of north Brooklyn.) Of the newer developments, Lupard says the real trend she's seeing these days is new construction "driving up prices in older condos, and making them more valuable."

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